Lion Energy completes field appraisal on two Indonesian coal prospects

Australian oil company Lion Energy Limited said Thursday it had completed field appraisal of two coal prospects in Papua and East Kalimantan.

Lion said the Papua?s area had been appraised as a good quality ?blue sky? exploration play with potential for delineation of in excess of 5 million tons (Mt) of mineable steaming coal and it was proceeding with formal Joint Venture negotiations. This concession is owned by a Japanese controlled Indonesian company.

Meanwhile, the Kalimantan?s concession, which is located in the south of the city of Tanah Grogot, was appraised as a good quality ?brown fields? exploration play with potential for the delineation of in excess of 5 Mt of mineable steaming coal.

?The (Kalimantan) concession is immediately adjacent to a recently closed >1Mtpa steaming coal operation which is undergoing rehabilitation. Within the concession there are numerous coal outcrops, the most striking being a shallow dipping seam, 7 meters across outcrop, with an indicated true thickness of some 8.0 metres (vendors shallow drill holes),? Lion said.

According to Lion, limited analytical data show heat values averaging 7,400 Kcal/Kg (two composite samples, vendor data) indicating good potential as a steaming coal.

Lion has entered into an arrangement with an Indonesian company to fund the working capital requirements of a coal project which has supply contract to the Philippines government-owned power firm National Power Corporation (Napocor).

Lion did not give detail of the project.

Lion has said that the contract with Napocor is 70,000 tons of coal, to be delivered within 12 months in six shipments, with the first shipment has already been shipped recently.

Lion said Thursday the Indonesian company had agreed to provide additional security to Lion for the additional money.

?At the present time, the Directors of Lion have not decided whether Lion?s ongoing participation in both of the proposed Joint Ventures will be carried out through Lion or through a separate company which will then be sought to be listed on the Australian Stock Exchange,? Lion added. (Robert)